Wednesday, November 29, 2006

The charity affiliate of the Washington Nationals yesterday filed a $4.4 million lawsuit against a former bidder for the franchise, contending he reneged on a promise to match the money generated at a fundraising gala last year.

The Washington Nationals Foundation said Franklin L. Haney Sr., a wealthy real estate developer who failed in a bid to buy the team, promised to contribute more than $400,000 to the charity, based on the amount raised at the team’s Diamond Gala in September 2005.

The lawsuit, filed in D.C. Superior Court, claims Mr. Haney used the pledge in an attempt to gain favor with Major League Baseball, D.C. officials and reporters during his bid for the team and reneged when baseball awarded the franchise to the family of local real estate developer Theodore N. Lerner in May.

“He never told anyone his promise was contingent,” said the foundation’s attorney, Geoffrey P. Gitner. “The Nationals and the foundation relied on his promise. He led us to believe he would honor his pledge.”

Mr. Haney’s attorney, Larry Blust, declined to say why Mr. Haney has not paid the foundation. But, he said the foundation cannot legally compel Mr. Haney to follow through on the pledge and that the case had no merit.

“I don’t believe there’s any binding obligation here,” Mr. Blust said.

The Washington Nationals Foundation is part of the Nationals organization, but operates as a separate nonprofit entity. Its goals include raising funds for youth baseball and softball teams, building and refurbishing fields and creating educational programs for children.

Mr. Gitner said the foundation has been unable to carry out some of its planned work because it expected to have the $400,000 promised by Mr. Haney. He also said that after Mr. Haney made his pledge, the foundation canceled some fundraising events, thinking they were no longer necessary.

Under the stadium lease agreement with the District, the team is required to “fund, maintain and vigorously” promote the foundation, but there are no specific requirements for how much money it must raise and contribute to the community.

Mr. Haney, whose real estate company is based in Tennessee but maintains offices in the District, drew attention and gained the support of some city officials last year when he promised to contribute as much as $200 million to paying cost overruns related to the construction of the Nationals’ new ballpark.

He also submitted a proposal to the District to become the master developer of a retail and entertainment district near the new stadium in Southeast. However, he was not selected.

His pledge at last year’s gala came at a time when the city and Major League Baseball were involved in tense discussions over the completion of a lease agreement for the Nationals’ new stadium.

Nationals officials acknowledged the uncertainty of the future of the team in the District and offered Mr. Haney the chance to rescind his pledge. He reaffirmed his offer, according to documents filed with the lawsuit, and the Nationals followed up by sending him an invoice for the pledged amount.

But in January, with the future of the Nationals still in question, Mr. Haney told Nationals officials he preferred to wait before following through on his pledge.

“Given that my pledge was made at a time when I, and everyone else, believed that the Nationals were here to stay, it is perfectly reasonable that we wait to see if, in fact, the team remain the Washington Nationals before I make any payment to the foundation,” he wrote to Tony Tavares, then-president of the Nationals.

Baseball awarded the franchise to the Lerner family in May, and the team followed up with requests for payment in June. Mr. Haney then said he would not pay.

The foundation is suing for breach of contract and fraud and is seeking the $400,000 and $4 million in punitive damages, plus attorney fees and interest.

To prevail in the lawsuit, legal analysts said the foundation likely will have to prove that it provided something to Mr. Haney in exchange for his pledge. The foundation claims that it allowed him to speak at the gala, thus providing him a platform to boost his stature in the D.C. business community.

The foundation also contends that Mr. Haney used the pledge to boost his bid for the Nationals franchise, though one source close to Mr. Haney had been informed ahead of time by Major League Baseball that the pledge would have no bearing on who would be awarded the team.

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